Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-04-14
PRINCIPLES GOVERNING TRANsPORTA.
TON,

Ihree years ago, In discussing the natu-
raj principles regulating railway rates
after succinct recital of the factors in
yolved in fixing rates, in a monograph in
the Popular Science Monthly Mr.. Gerriet L.
Lansing pointed out that the only
course left to a carrier by rail is
to take freight at whatever rate the ship
pers can send it, with profit to themselves,
in the hope that the whole of the traffic
will amount to a greater sum than the
cost of the service.
Thus it happens that carrier may for
years transport freight at rates below the
cost of the service, for the producer will
cease to send when it becomes unremuner-
ative to him. The rates, he added, can
never be more than the value of the serv-
ice, but they may be less than its cost
Between these two limits
there is in practical operation a varying
scale of rates determined by competition
both of parallel lines and various CONNER
cial. forces"
In the discussion of the interstate COM
merce law, both before its passage and
since, the public thought lost sight of these
principles, but the operation of the law
in the brief week of its vitality, has re-
called them to the public mind. And they
cannot be too much dwelt upon, or be too
thoroughly digested The public is now
realizing, as probably it never has before,
the truth of Mr.. Lansing's statement, that
wherever there is fair discrimination
exercised in fixing rates, it will be found
to be based on one or more of the forms of
competition" that is, competition of capt.
tai, of parallel roads, of water routes, of
markets, and the efforts of the railroad
to increase its net income, by increasing
its traffic with lower rates.
The people now realize let us hope, the
truism thus formulated by the essayist:
" As competition is generally conceded to
be more potent regulator of prices than
all other forces, to prohibit determinations
resulting from it will also prohibit compe-
tition." To apply this rule to the present
situation Certain classes of exports and
imports went by rail at rate determined
not by the cost of carriage, nor by the
value of the service but by the COMPETE
ton between water and rail routes In
the meantime freights originating at points
not touched by competition determined
their rates by the value of the service as
nearly as that could possibly be ascer-
tained-a matter of exceeding difficulty
and seldom ever established, for the OBJ
yious reason that mixed freights, mixed
freight and passenger carriage, the posi-
bility of rolling empty cars one way, and
the well nigh impossible task of adjusting
the correct percentage of operating ex-
penses to be borne by particular classes of
freights, and the absolutely impossible
task of determining the actual cost in
VOWED in carrying particular shipment,
prevents the accurate entertainment of the
true value of the service.
Then came the interstate commerce law.
disturbing the natural commercial rela-
tons described. 1t prohibits the carriage
of freights dependent for their movement
by rail upon competition, except the car
rier agrees also to transport like freights
at like rates for a shorter distance which
do not originate in competition, and in
which none of the elements of competition
appear. As this would, in such vast
nunber Of cases, eliminate wholly the
question of the value of the service, all
transcontinental carriers were driven to
abandon the competitive rates, and trust
for their reward to those which are more
nearly related to the value of the service
rendered.
This is, as We understand it, the exact
situation to-day, and is discrimination
forced by law in favor of water routes and
against rail lines. Certainly the shippers
aud producers at points where competition
is not factor in determining the
rate charged, are not ben
Gifted, nor can they ever be. 1t
is replied that sea ports may still receive
and ship by water routes and thus be able
to supply interior places that heretofore
hive been supplied from competitive
points nearer to them, and that fall within
the limit of the short haul But this is
fallacious, for with the retiraey of long |
haul competition to the cover of local rates.
the water carriers advance their charges. |
taking care, however, to keep them below
the line at which the carriers by rail could
again compete with them. Thus, it APP
pears tous that the only thing which can
in any degree affect the raising of prices
for carriage of freights which formerly
moved at rates determined by ship and
all competition, is the competition be-
ween water carriers themselves. As this
S Limited, unstable, and, as we hare shown,